CGFM Exam 2 - Section 2, Chapter 2 -
Fund Accounting and Reporting
Questions and Answers
GASB Codification Section 1300 - Answers -Establish the foundational accounting and
reporting standards for state and local FUNDS
Fund - Answers -Funds are fiscal and accounting entities that are segregated for the
purpose of carrying out specific activities.
3 major categories of funds used by state and local governments - Answers -
governmental, proprietary and fiduciary.
Governmental Funds - Answers -Traditionally been used to account for the general
services provided to the public. These services include public safety, health,
transportation, social services, recreation and the administration of the government.
focus of governmental funds for reporting purposes - Answers -use the current financial
resources measurement
focus and modified accrual basis of accounting. Expendable assets are used to pay for
current liabilities. The difference between assets and liabilities is fund balance.
Which funds can never be considered major funds? - Answers -A fiduciary funds and
internal service funds can never be major.
Describe the columnar requirements for the budgetary comparison schedule. - Answers
-The budgetary comparison schedule requires the original budget, final budget and
actual. Any variances that are reported are optional.
where is the budgetary comparison schedule located - Answers -required supplemental
information (RSI), which means it is presented after the basic statements and the notes.
what funds require a budgetary comparison schedule - Answers -budgetary comparison
schedule is required for the general fund and each major special revenue fund with a
legally adopted annual budget.
Type of accounting used for governmental funds - Answers -current financial resources
measurement focus and modified accrual basis of accounting.
, Types of Government Funds - Answers -General Fund, Special Revenue Funds, Capital
Projects Funds, Debt Service Funds, Permanent Funds
General Fund purpose - Answers -- to account for and report all financial resources,
except those required to be accounted for in another fund.
- Considered most important fund.
- Most administrative services of the government should be accounted for in the general
fund.
General Fund sources of revenues & expenditures - Answers -• Property taxes, sales
taxes and income taxes are the most common revenue sources used to finance
government activities.
• Permit and license fees may also be significant resources that are used to finance
services.
• Other major revenue sources are intergovernmental grants and shared revenues.
• Fines, forfeitures and investment earnings may be substantial for some governments
Special Revenue Funds Purpose - Answers -should be used to account and report for
the proceeds of specific revenue sources (other than major capital projects) that are
restricted or committed to expenditure for specified purposes.
Single Audit Act/OMB A-123 Audit - Answers -organization-wide audit or examination of
an entity that expends $750,000 or more of Federal assistance (commonly known as
Federal funds, Federal grants, or Federal awards) received for its operations
Capital Projects funds - Answers -used to account and report for financial resources that
are restricted, committed, or assigned to expenditure for major capital facilities and
further capital assets, other than those financed by proprietary and trust funds. Provide
for efficient management of resources for multiple-year capital projects
Debt Service Funds - Answers -is required to be used when legal requirements
mandate the use, or when financial resources are being accumulated to make principal
and interest payments, such as through earmarking tax revenue
Permanent Funds - Answers -A permanent fund is used to account for governments
receive bequests from individuals stipulating that donated resources are to be invested
by the government. The bequest restricts the use of resources so that only the earnings,
and not the principal, may be used for activities that benefit the government.
Proprietary Funds - Answers -proprietary funds generally match revenues to expenses
that result directly and jointly from the same transactions or other events, such as sales
and cost of goods sold. Proprietary funds require a fee or user charge. Similar to the
private sector.
2 types of proprietary funds? - Answers -(1) Enterprise and (2) Internal Service Funds
Fund Accounting and Reporting
Questions and Answers
GASB Codification Section 1300 - Answers -Establish the foundational accounting and
reporting standards for state and local FUNDS
Fund - Answers -Funds are fiscal and accounting entities that are segregated for the
purpose of carrying out specific activities.
3 major categories of funds used by state and local governments - Answers -
governmental, proprietary and fiduciary.
Governmental Funds - Answers -Traditionally been used to account for the general
services provided to the public. These services include public safety, health,
transportation, social services, recreation and the administration of the government.
focus of governmental funds for reporting purposes - Answers -use the current financial
resources measurement
focus and modified accrual basis of accounting. Expendable assets are used to pay for
current liabilities. The difference between assets and liabilities is fund balance.
Which funds can never be considered major funds? - Answers -A fiduciary funds and
internal service funds can never be major.
Describe the columnar requirements for the budgetary comparison schedule. - Answers
-The budgetary comparison schedule requires the original budget, final budget and
actual. Any variances that are reported are optional.
where is the budgetary comparison schedule located - Answers -required supplemental
information (RSI), which means it is presented after the basic statements and the notes.
what funds require a budgetary comparison schedule - Answers -budgetary comparison
schedule is required for the general fund and each major special revenue fund with a
legally adopted annual budget.
Type of accounting used for governmental funds - Answers -current financial resources
measurement focus and modified accrual basis of accounting.
, Types of Government Funds - Answers -General Fund, Special Revenue Funds, Capital
Projects Funds, Debt Service Funds, Permanent Funds
General Fund purpose - Answers -- to account for and report all financial resources,
except those required to be accounted for in another fund.
- Considered most important fund.
- Most administrative services of the government should be accounted for in the general
fund.
General Fund sources of revenues & expenditures - Answers -• Property taxes, sales
taxes and income taxes are the most common revenue sources used to finance
government activities.
• Permit and license fees may also be significant resources that are used to finance
services.
• Other major revenue sources are intergovernmental grants and shared revenues.
• Fines, forfeitures and investment earnings may be substantial for some governments
Special Revenue Funds Purpose - Answers -should be used to account and report for
the proceeds of specific revenue sources (other than major capital projects) that are
restricted or committed to expenditure for specified purposes.
Single Audit Act/OMB A-123 Audit - Answers -organization-wide audit or examination of
an entity that expends $750,000 or more of Federal assistance (commonly known as
Federal funds, Federal grants, or Federal awards) received for its operations
Capital Projects funds - Answers -used to account and report for financial resources that
are restricted, committed, or assigned to expenditure for major capital facilities and
further capital assets, other than those financed by proprietary and trust funds. Provide
for efficient management of resources for multiple-year capital projects
Debt Service Funds - Answers -is required to be used when legal requirements
mandate the use, or when financial resources are being accumulated to make principal
and interest payments, such as through earmarking tax revenue
Permanent Funds - Answers -A permanent fund is used to account for governments
receive bequests from individuals stipulating that donated resources are to be invested
by the government. The bequest restricts the use of resources so that only the earnings,
and not the principal, may be used for activities that benefit the government.
Proprietary Funds - Answers -proprietary funds generally match revenues to expenses
that result directly and jointly from the same transactions or other events, such as sales
and cost of goods sold. Proprietary funds require a fee or user charge. Similar to the
private sector.
2 types of proprietary funds? - Answers -(1) Enterprise and (2) Internal Service Funds
